Trend Lines

Trend lines are perhaps the most shared form of technical analysis in forex trading and perhaps one of the most underutilized ones also.

If drawn properly, they can be as correct as any other technique. Unluckily, most forex traders do not draw them properly or try to make the line fit the market instead of the other way around.

In their most essential form, an uptrend line is drawn along the bottom of easily recognizable support areas (valleys). For the downtrend, the trend line is drawn along the top of easily recognizable resistance areas (peaks).

How to draw forex trend lines?

To draw forex trend lines correctly, the only thing you have to do is locate two major tops or bottoms and then connect them. Yup, it is that simple, just like that!

There are three types of trends:

*Uptrend (higher lows)

*Downtrend (lower highs)

*Sideways trends (ranging)

Some important factors you need to remember to use trend lines in forex trading:

*It takes at least two tops or bottoms to draw a valid trend line, however, it takes three to approve a trend line.

*The Steeper the trend line you draw, the less consistent it is going to be and the more possible it will break.

* Just like horizontal support and resistance levels, the more times the trend lines are tested, the stronger they become.

*This is the most important ,DO NOT EVERdraw trend lines by pushing them to fit the market. If they do not fit right, then that trend line is not a valid one!

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